Settlement Will Ban Defendants From Future Prize-Promotion Activities
Oasis Southwest, Inc., a Las Vegas, Nevada-based prize promotion telemarketer and its two principals have agreed to settle Federal Trade Commission charges that the company was running a phony prize-promotion, primarily targeting senior citizens. According to the FTC, the company allegedly promised consumers that they would receive an award on the condition that they purchase "Say No To Drugs" promotional items. The two settlements to the charges ban Oasis, Ray Jojola, president and sales manager of Oasis, and Michael A. Portalatin, president, secretary, treasurer, and director of Oasis, from engaging in any prize promotion telemarketing or recovery room service in the future. In addition, under the terms of their settlement, Oasis and Michael Portalatin are required to pay $30,000 in consumer redress.
In July 1996, the FTC announced "Project Jackpot," a major enforcement effort targeting firms that fraudulently offer purportedly valuable prizes to consumers to induce them to purchase products. In "Project Jackpot," the FTC filed eight law enforcement actions, the State Attorneys General filed 43 actions, and the U.S. Postal Service filed five actions.
According to the FTC's complaint, the defendants allegedly telephoned consumers and told them that they would win a valuable prize if they purchased "Say No to Drugs" items. Consumers were told that the award would be worth significantly more than the amount they were asked to pay. In fact, the FTC alleged, the awards consumers received, if any, were not worth more than the consumers paid. The FTC also charged that the defendants failed to disclose, clearly and conspicuously, that no purchase was necessary to win a prize, in violation of the Telemarketing Sales Rule.
The two settlements permanently ban Oasis, Portalatin, and Jojola from engaging -- or assisting others to engage -- in any telephone premium promotion, prize promotion, or recovery room service. In addition, the defendants are prohibited from violating any provision of the Telemarketing Sales Rule. Further, the settlement with Oasis and Portalatin requires them to pay consumer redress in the amount of $30,000. Finally, the settlements contain a number of recordkeeping requirements designed to assist the FTC with monitoring the defendants' compliance.
The Commission votes to file the settlements in the U.S. District Court for the District of Nevada, in Las Vegas, Nevada, were 5-0. The settlements were filed on June 6, and were signed by the judge on June 9. This matter was handled by the FTC's San Francisco Regional Office.
NOTE: Stipulated final judgments and orders for permanent injunctions are for settlement purposes only and do not constitute an admission by the defendants of a law violation. The judgments are subject to approval by the court and have the force of law when signed by the judge.
Copies of the stipulated final judgments, as well as other documents associated with "Project Jackpot," are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(Civil Action No. CV-S-96-654-PMP (RLH))
(FTC Matter No. X960079)
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